Steve - sorry for the lack of clarity - its all quite clear in my mind but evidently not in electrons. If you've sold an option that is, or has become "in the money", and therefore at risk of assignment, do you have any sort of standard operating procedure for when to buy it back prior to expiration? Do you wait until, say, the beginning of the week the option expires, or are you generally "safe" until a day or so before? That's what I was after.
Would be interested in your selection criteria for credit put spreads and how you arrived at it. I would think you could sell the spread when the stock was in between strikes. Do you look for a certain rate of return vs. the stock?
BTW, what do you think of a put spread that's diagonalized? Although not doable on AGPH, any company with LEAPS would enable you to buy an OTM LEAP put (they're quite cheap, relatively speaking), and write put credit spreads against it as often as you'd like, for up to 2 years? This keeps margin down, and you could do this over and over again. The LEAP would be rapidly paid for, and you'd be writing for profit within about 2-3 months. Keep some commission costs down. The same thing could be tried with an OTM LEAP call, writing "covered" calls against it, OTM. It too would be paid for quickly, though not as quickly as the LEAP put. For a bullish stock, I think your credit put spread fits my psychological profile better - its in the bank, and I might have to give it back, rather than its out of the bank, and I might get it.
Regards,
Randy |
